Mongolia Prepares for Effects of Trump’s Tariffs
The recent discussions within Mongolia’s National Security Council have brought to light a growing concern in Ulaanbaatar: the country’s heavy reliance on China for its economy, and the potential risks posed by escalating trade tensions between the United States and China.
Despite being seemingly on the sidelines of the US-China trade war, Mongolia is not immune to its effects. With exports to the US making up less than 1% of Mongolia’s total exports, direct exposure to American tariffs, including the recent 10% levy, is minimal. Any adjustments made under the Generalized System of Preferences would also have negligible impact on Mongolia’s trade balance.
However, the broader implications of the trade war could have indirect consequences for Mongolia’s economy. As a close neighbor and major trading partner of China, any disruptions in the Chinese economy as a result of the trade war could potentially impact Mongolia through reduced demand for its exports or fluctuations in commodity prices.
As such, Mongolia finds itself navigating a delicate balance between its economic ties with China and the potential fallout from the US-China trade tensions. The National Security Council’s discussions highlight the need for Mongolia to diversify its economy and trade partners to mitigate the risks of overreliance on any single country. Only time will tell how Mongolia will adapt to the changing dynamics of the global trade landscape.
